Bitcoin Enters “High-Risk” Zone Hinting at Early Bull Market: Glassnode

Vignesh Karunanidhi
Bitcoin Enters "High-Risk" Zone Hinting at Early Bull Market: Glassnode
Source: Reddit

Leading crypto analytics platform Glassnode has reported that key on-chain indicators assessing Bitcoin’s value have entered a “high-risk” zone. This potentially signals that the cryptocurrency is in the initial stages of a new bull market.

In a recent blog post, Glassnode shared that the long-term holder market value to realized value (MVRV) indicator, used to identify when Bitcoin is overvalued or undervalued compared to its fair value, had pushed firmly into the “high-risk” band.

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This level is typically seen during the early phases of a BTC bull run, showing long-term investors have returned to meaningful profitability.

The MVRV indicator contrasts BTC’s current “market value” with its “realized value”—the price when coins were last moved between long-term holder wallets. This strips out short-term market sentiment and provides a metric on whether the market is overheated.

Bitcoin has been on an uptrend

Bitcoin’s price has been steadily climbing over the past week, rising to around $48,700 at press time. This renewed strength has been attributed to slowing outflows from the Grayscale Bitcoin Trust (GBTC). It also comes along with $9.1 billion flowing into the new U.S. spot Bitcoin ETFs since their January 11th launch.

Additionally, growing spot ETF inflows display renewed institutional appetite to gain direct Bitcoin exposure after fears around contagion from the FTX collapse subside. 

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In essence, both trends illustrate the early stages of a classic supply and demand shift. Skeptical sellers are drying up while sidelined buyers regain conviction.

However, it remains far too early to declare with certainty that Bitcoin has indeed kicked off its next leg. The crypto markets remain hugely volatile and unpredictable. With long-term holder profits recovering, the data suggests Bitcoin bulls may slowly be gaining control.